Archive | cohabitation

I recall some years ago, a client asking me to assist her with a divorce. She had only been married for 8 months. I told her, of course, that English divorce law required her to wait until the marriage was at least 12 months old before she could initiate a divorce. (There were no grounds for seeking a nullity of the marriage which does not require an applicant to wait). Then she hit me with the bombshell: she and her husband had lived together as cohabitants for 22 years before getting married. I had to quickly change my focus and try to explain to her the impact of premarital cohabitation in a short marriage.

To the virtual postbag…

The case I mentioned above came to mind when looking into my virtual postbag this week. K sent me the following:

Hi, my daughter is divorcing her spouse after just over two years.They cohabited pre marriage and her partner did some work on her house which she has owned in her name since 1998. Her partner is claiming for work he says he has carried out on the house. If the work was carried out when they were cohabiting does this count in a divorce settlement? My daughteris not sure if they were even living together when the work was carried out.

Well, I can answer this simply (for once): premarital cohabitation in a short marriage is highly relevant. In essence, the family court will add the years of premarital cohabitation onto the years of the marriage itself. So, for instance, if there are seven years of premarital cohabitation and only two years of formal marriage, the family court will regard this as a nine-year marriage. However, the premarital cohabitation should ‘seamlessly’ transition into the marriage. That is, if there is a big gap between the premarital cohabitation and the subsequent marriage then the prior cohabitation may be disregarded. The devil is always in the detail.

Having a short marriage extended by the addition of premarital cohabitation years is hugely important. The significance is that in the absence of children, in a short marriage, the court will probably find it easier to provide divorcing spouses with a clean break. But the longer the marriage the more likely it is that the court will look more closely at the division of capital and the requirement for one spouse to have spousal maintenance after the divorce. It is often the case that one spouse has brought a capital asset into a marriage, usually in the form of a house. Bringing a house into a marriage could be seen as a form of capital contribution. At the point of divorce, spouses will often argue that such a contribution should be ‘ring-fenced’ and ask that they be allowed to retain the value of the contribution itself. However, it will become harder for a spouse to argue that they should be allowed to keep their contribution or, the greater part of the value of their contribution, the longer the marriage goes on. This is because over the course of a long marriage, with the joint endeavours of both spouses to build up capital and income within the marriage relationship, the contribution at the start of the marriage will appear more and more insignificant.

Premarital cohabitation

I do not know about K”s daughter’s situation. I do not know if there are children in this marriage. The existence of children, and the prioritisation of their needs by the family Court, will trump most arguments about ring fencing of contributions at the start of a marriage. Also, if the husband in this case was the main carer of the children while K’s daughter went out to work, then his contribution as a home maker and provider of child care for the children will be regarded as just as important as that of breadwinner. With the existence of children, the home that may have been in the name of one party only before marriage, evolves over time into the matrimonial or family home. The family court may therefore regard it as impossible to do justice to both spouses, and the children, if they allow one spouse to ring fence the contribution from many years ago.

I think it is crucial for K’s daughter to establish whether the work carried out on the home was during the period of seamless cohabitation leading up to the marriage. If the husband was just staying at the weekends when this work was carried out then that is unlikely to be regarded as pre-marital cohabitation. The husband in this case may have paid monies towards the mortgage and therefore argue that thsi increases his interest in the property. It is important to note that the marriage itself will probably steer the family Court towards looking at the situation for this couple ‘in the round’. By that, I mean that the family court is less likely to be interested in looking at receipts from B&Q or Homebase from seven or eight years ago to see who paid for paint or white spirit. The family Court will take a ‘broad brush’ approach (no decorating pun intended) to sorting out the competing financial claims on divorce.

Finally…

I have written before about the impact of cohabitation in family law cases. Cohabitation is relevant in the cases of spouses who have lived together before marrying but also in the case of spouses who divorce (and receive spousal maintenance) and then live with another partner. In my humble opinion, the UK government has failed to provide a legislative framework that can assist the millions of couples who now cohabit rather than get married. This lack of political will in the face of this profound social change, contributes to inconsistent judicial thinking on cohabitation issues when they arise in the context of divorce financial settlement.

It is a common question in divorce: “Can my ex claim money from my new partner?” Or: “Can my new partner’s ex claim against me?” It seems to be a fear for most spouses going through the divorce process who are cohabiting, or thinking about cohabiting, with a new partner. When I receive questions like this, I always think: this time I will give a really short, clear answer. But just like my efforts at colouring in when younger, I end up going over the lines. So it is with my blog posts about English family law.

And so to the virtual postbag. This is the question, posed by C:

I would like to know that if my new partner and I got together (living or married) could his ex-wife claim on my monthly wage? Plus I own my house outright would she have any claim on that?Thank you.

Each case turns on its own facts. This is what lawyers say all the time to just about every enquiry that comes in their direction. Put another way, it is essential to know the facts of a given situation if any advice is to be given in a legal context. To say anything useful in response to C’s question I will need to colour outside the lines. And I have written before about the status of co-habitees in family law. Now, as every regular reader of my blog will know, I do not, ever, give out advice. I can only make observations or prompt further questions for my readers to consider.

Can my ex claim money from my new partner?

So, in answer to C’s question, I can make the following points:

Since it is your house, your new partner’s ex cannot make any claim against your property. Full stop.

I presume that your reference to your new partner’s ex-wife means that he has obtained a divorce and a financial settlement. If he has NOT finalised his divorce and financial settlement, and you move in together, he must disclose that fact to his solicitors. If he does not have solicitors, then he must disclose that fact to his wife or her solicitors. This is called the duty of disclosure.

If the divorce and financial settlement have not been sorted out yet, and you move in together then his ex’s solicitors may say that you represent a resource to your partner. The fact that you are housing him means that he may not need as much of the equity in his matrimonial home as his ex-wife. If your partner has children from his marriage and they are predominantly going to live with his ex-wife then she may say their housing needs should be added to her own housing needs so she should have more of the equity. And anyway, her lawyers may say, since you are helping your partner to address his housing needs, the ex-wife can how have more of the equity since he does not have as great a need.

If the divorce and financial settlement have not been sorted, and the ex-wife wants spousal maintenance then she will say the fact that you are living together means that you are sharing your living expenses so perhaps this frees up a bit more income for spousal maintenance. But she cannot claim against your monthly income. That is your money – not your partner’s nor his ex-wife’s.

But, if the divorce and financial settlement have been sorted then the impact of you living together is more limited. There should be a final court order dealing with the matrimonial finances. The key thing is whether the ex-wife has an order for spousal maintenance. If she does, then she may argue that moving in with you means that your partner is sharing his living costs with you so he can afford to pay his ex a bit more. The ex-wife may therefore make an application to vary her spousal maintenance upwards.

And C should remember to consider protecting her own position in relation to her new partner if she lets him move in. What about a cohabitation agreement between you to sort out who pays what over the course of time?

I could go on quite a bit with these observations. The answer to “Can my ex claim money from my new partner?” is not as straightforward as it might appear. But I have almost worn down my crayons so time to pack it in.

As I confessed in an earlier post, I can’t resist a good divorce calculator. I was talking then about a divorce calculator for journey costs. The thingymajig below calculates simple interest on a given sum. I know, you could probably do the maths in your head, but in a lighthearted way, I want to highlight the usefulness of interest in divorce and separation cases.

A divorce calculator for interest

In a divorce settlement, your spouse may offer to pay you a lump sum. The lump sum may be to compensate you for, as an example, transferring over the interest in the matrimonial home. But the problem is, your spouse says you will will have to wait for the whole sum or part of it. If you agree to wait then the money is not sitting in your account earning interest. Yes, I know that savings rates are rubbish but, in the legal world, cash is king. If I am going to agree to my client waiting to get their hands on an agreed lump sum I will ask for interest at the court rate. That, by the way, is 8%. Yes, I do mean 8%. If you can find a savings account offering anything near 8% then I’m a monkey’s uncle. So demand interest.

You have separated from the partner of your children. You want to agree child maintenance. You realise that inflation will eat into the value of the payments as time goes by. So, you agree to increase the payments on an annual basis by a set percentage. The figure is up for agreement although you can of course vary it each year. Inflation last year was 2.7% so you would want to agree at least 3% to keep pace with inflation.

In a divorce or a co-habitee separation one of the parties pays off a joint debt. It is agreed that half of the sum paid out will be reimbursed but there is a worry that the commitment to repay may fade with time. You can agree to apply a relatively high rate of interest on the unpaid sum so there is an incentive not to delay payment. Example: John has a credit card debt of £7,000. It is agreed with his ex-partner, Sue, that at least £6,000 of that sum was for joint spending. John agrees to pay off the whole sum but Sue will owe him a ‘credit’ of £3,000. Sue does not seem very focussed on when or how she will re-pay John the £3,000. So, before paying off the credit card liability, John and Sue agree that he will be paid back the £3,000 within 28 days. But in the absence of payment at day 28, interest will run at 8% until it is paid off. Sue therefore needs to get a move on.

I will try to track down some other calculators that I think might be useful in a family law situation. Don’t knock it – it keeps me off the streets.

I still surprise some of my clients, sitting in front of me with a pressing need for legal advice on a family law matter, when I take an avid interest in the identity of their other professional advisers and enquire about the financial planning that I expect to see in place. I suppose they expect me to launch into questions about unreasonable behaviour or compromising comments on their spouse’s Facebook timeline.

I’m always surprised that they are surprised. I wouldn’t dream of dealing with, say, a client who is facing divorce proceedings who owns a business, without talking to his or her accountant or financial planner. I will want to understand how the business, and the family unit, ticks and how both may be affected by the advice I will be offering.

As a family lawyer dealing with divorce, civil partnership or separation issues I always have one eye on the financial planning issues that will arise in a case. When I refer to financial planning, I do not mean sitting down with a divorce client and simply subtracting the outstanding mortgage from the value of the matrimonial home to work out the net equity. No, I mean something much more sophisticated and, in general terms, beyond the skill set (and regulatory authority) of lawyers.

I will set out just a few examples.

Financial planning in divorce and civil partnership dissolution

With the exception of the most straightforward of divorce cases, perhaps one where there are no children or little or no assets, I would look to import financial planning advice for my clients. The following scenarios are familiar ones:

The family home may need to be sold but this will involve exploring realistically the mortgage capacity of each spouse. How much can be borrowed and what would be taken into account by a mortgage lender as income? Will bonuses count? If a wife is to receive maintenance payments from her husband after divorce, will this count as income in her name and improve her ability to obtain a mortgage advance?

How much money will there be to live on: now, in five years’ time, or at retirement? When family lawyers sit down with their clients to complete financial disclosure they need to detail all the outgoings their client will face. Speaking frankly, for most lawyers, this has always been a bit of a chore. There’s nothing exciting about working out utility costs or the public transport costs for your client to get to her new job. Where’s the law in that? So it tended to be done in a pretty slapdash way. But this exercise is crucial. The outcome impacts directly upon your client’s quality of life after divorce. It deserves some time and attention. Financial planners use fairly sophisticated cash flow software that models the fluctuations in income and outgoings for clients over a long period of time. In other words, they properly plan for the future. This data is invaluable for the family lawyer who wants to negotiate the best outcome for their client in any divorce settlement.

Never mind the family home, what about the pensions? How many times have I had a client say to me: “My husband says it’s not worth bringing pensions into it. We should ignore them”. It is surprising how often pensions appear to be ignored. I don’t ignore them. I have them valued and then I decide whether they can be ‘ignored’. Pension valuation can be difficult. And let me make one thing clear. £100 of pension funds for a female client is not the same as £100 for a male client. You see, women live longer (just have a look at the figures kept by the Office for National Statistics). So that £100 for a woman has to stretch further. In simple terms, it will not yield as much income in retirement. And here is another common refrain: “My husband says we should split the pensions in half. That’s fair”. Well it’s sounds fair, but it probably won’t be in the long run. Any family lawyer who fails to obtain advice from an appropriate expert, such as a financial planner, with the relevant pension expertise, is selling their client short.

Maintenance payments for a spouse or children may have been agreed. But what happens if the payer of maintenance dies? I don’t understand why more lawyers don’t obtain advice for their clients on cost-effective insurance policies to pay out in the event of death. This solves any cash flow problems for the ex-partner who would otherwise struggle with the financial burden of any children of the marriage. And it also helps to prevent claims against the estate of the deceased under the Inheritance (Provision for Family and Dependants) Act 1975.

Financial planning for cohabitants

The law in England and Wales does not provide adequate protection for couples who have cohabited, in some cases, for many years, and even had children. Living Together Agreements can provide a sensible financial planning exercise for the relationship ahead. It is particularly important where property may only be owned by one party or there is a common purchase but with unequal monetary contributions. It is crucial for Wills to be put in place if proper provision is to be made for the other partner. It is also possible to put in place nominations for death benefits under certain pension entitlements. Life insurance, again, can become a sensible step to take to ensure that untimely death does not leave partners or children in the lurch.

I am fortunate in my day job as I can call upon my colleague, Sam Jermy, a financial planner, to help my clients. The need to import financial planning advice is so integral to the family legal work that my firm undertakes that we formed a joint venture with a firm of chartered financial planners. A free initial consultation is perfect to identify the issues that I need to concentrate on in obtaining the best outcome for my clients. I appreciate that not everyone has access to a chartered financial planner. But, if you find yourself encountering some of the issues raised in this blog post, ask your lawyer if financial planning advice is needed. Don’t leave it until the doorstep of the court or the drawing up of the negotiated settlement – an opportunity for prudent and informed financial planning will have been missed.

STOP PRESS: I’m pleased to announce that Sam Jermy, a financial planner with Family Law Financial Planning, has offered some guest blog posts on the financial planning work he conducts with family law clients. In keeping with the vast Divorce Finance Toolkit budget at my disposal I have agreed a package of chocolate digestives and tea for Sam’s blogging contribution. If I judge his blog posts to be particularly helpful for my readers I will even let him dunk the biscuits. Watch this space.

How to find the best family lawyer

Court proceedings, whether in divorce, civil partnership or involving children, are stressful. (Just to state the bleeding bloody obvious). A family law matter is rendered even harder if the solicitor you have instructed does not exactly fill you with confidence. Even worse is the prospect of having to turn up at court (a potentially intimidating experience for anyone) when your stomach is doing back flips and you don’t feel your legal representative is fully in command of their brief. So I want to share my thoughts on how to find the best family lawyer.

I have huge sympathy for those lawyers who still offer public funded (legal aid) family work. Their caseloads are huge. Their clients are anxious. The law is not rendered any less complex just because your client is on legal aid. Most of the time, the pressure is so intense, that the best you can do is to constantly ‘firefight’. The firm’s overheads are just as high as the private law firm down the road but the legal aid family law firm gets paid only a fraction of the fees that private firms will demand. Family lawyer burnout is a sad reality.

And so to the virtual postbag…

Which contains this plea from M:

I really need some help. I am petrified my solicitor is not worth their salt as I am struggling alot with the E1 form and not getting a hold my hand experience. I have seen they are not listed on the Resolution.org site and my ex is taking me to court in three weeks. I am legal aid funded and have been with this same solicitor throughout a two year ordeal, trying to also be a full time mummy. It may be complete paralysing fear…..but I have now heard some bad comments from a Domestic Violence Support group I have been attending about my solicitor. I would be grateful for any help! Thank you.

M later clarified that Resolution had confirmed that her solicitor was a Resolution member. My first reaction upon seeing M’s predicament was that she should immediately contact her solicitor and explain her concerns. If I was M’s solicitor, I would want to know if one of my clients felt so desperately anxious about their situation. It is rather surprising to see that M’s case has been going for two years. M refers to an impending court hearing and the need to complete a Form E1. I am therefore assuming that M was not married to her ex-partner but that they had a child or children together and that the impending court hearing is in relation to a Children Act (Schedule 1) case. Such cases allow applications for periodical payment, lump sum orders and property adjustment orders on behalf of a child or children of parents who are not married or in a civil partnership.

I do not know the details of M’s case and therefore know better than to comment any further but I can understand how the prospect of changing solicitors in the middle of court proceedings will be daunting. However, if M gives her solicitor a chance to make her feel that there is a clear game plan for her case then she may have the assurance she seeks. The Form E1 is a much reduced version of the full Form E (used by married couples in divorce proceedings). Form E1 tends to require factual information only like income and liabilities whereas Form E has narrative sections at the end which present a great opportunity to present your case well or a blissfully ignorant way to ruin it.

So, for M, I think she needs to meet with her solicitor to make sure her Form E1 is up to scratch. It will be for her solicitor (or perhaps, her barrister) at the hearing to explain to the court what M and her child/children wish to achieve. Because Form E1 does not have the narrative boxes to explain the salient points of a case (an oversight in the design of these forms, in my humble view) I would normally provide the court with a chronology of key events and a summary or position statement on M’s behalf so the court (and M’s ex) is fully aware of the relevant issues in the case.

There may be all sorts of reasons why M’s solicitor hasn’t had the time to make M feel looked after. If M feels that the explanation provided is unsatisfactory then she should say so and her solicitor should deal with the matter as a complaint and seek to resolve M’s dissatisfaction. If M feels the proposed solution is not good enough or if she progresses to the hearing and still feels that she is not receiving a proper service then she should approach another firm (it will need to be one that offers legal aid) to see if they feel able to take it over. Although this transfer will require the permission of the Legal Services Commission who administer the legal aid pursestrings. There should be time between this forthcoming hearing and the next one to change legal firms if that remains M’s wish. I wish her well.

Choosing a new solicitor

I do appreciate how hard it can be to identify a good solicitor when you may not have a recommendation to act upon. I know that there are plenty of online legal directories springing up that claim to have the details of the finest lawyers around. Most of these directories, especially the ones that pop up after a Google search are… how can I put this? Shite. Yes, that about sums them up. I am asked all the time how people can work out who are the really good family lawyers. I was asked so many times that I committed my thoughts to an eBook, imaginatively titled: How to find the best Family Lawyers. My eBook is free to anyone who cares to subscribe to my blog, using one on those sign-up boxes that lurk around the edges of the page or pop up when you least expect it. Go on, subscribe. Knock yourself out.

Any divorce lawyer will tell you that it is better to obtain advice about an appropriate financial settlement upon divorce than simply let things drift. People’s lives move on, sometimes for the better, sometimes for the worse, but any delay of years can usually make it harder to sort out (never mind agree) an appropriate settlement. Even when ex-husbands and wives are trying to negotiate financial claims many years after the separation they can get a nasty surprise to learn that the family court will value assets at today’s prices, not six or seven years ago if that happened to be the date of divorce or separation.

My postbag has a plea from Tina:

I left my husband six years ago, and have been living with a new partner. I never divorced. I am on the bread line – used all my life savings to help support my new partner, even bought him 3 cars. I’ve no income at all. My new partner’s on very low income. We live in rented house, and new partner is talking about leaving me now. I’ve no security. My husband still has his own business, and promised inheritance from his uncle. Could i be eligible for sposal maintenance? My husband was also left his mum’s house, which i didn’t get a penny from. Plus I’ve no pension, and I’m 52. I had a heart op two years ago. Thank you.

There is so much about Tina’s situation that I do not know about. Readers of my blog will know that the devil is always in the detail when it comes to the family’s court’s jurisdiction which takes all circumstances into account. As usual, because I cannot and do not offer advice on my blog, I can only make some observations about Tina’s desperate situation:

I do not know the length of the marriage . The longer the marriage, the more likely the presumption of the court to consider it reasonable for Tina’s husband to make financial provision for her, despite the significant period of separation;

I do not know whether Tina raised children with her husband during the marriage: is Tina’s lack of pension provision because she was busy bringing up the children? A factor that would weigh heavily with the court.

When did Tina’s husband receive his mother’s house? I presume this was an inheritance? The inheritance is likely to be significant, especially if Tina and her husband already owned their own property and the mother’s house is a surplus asset.

Tina’s health is not good at the moment and she does not appear to have any earned income. Her health may severely limit her ability to get paid work. This would concern the family court.

There is mention of the husband’s business. Was this a business he had during the marriage? Was it a company and did Tina have any formal interest in the business, such as a shareholding? Did Tina make an indirect contribution to the value of the business by dint of the marriage? This business could be hugely significant in any divorce but I don’t have any information.

Tina mentions the ‘promised inheritance’ from the husband’s uncle. This is only a promise and the uncle could change his Will at any time.

Unless there are very valuable assets in the marriage, it is likely that a court would deal with a financial settlement on the basis of ‘needs’. This means that a court may compel Tina’s husband to use any assets he may have built up after Tina left him to satisfy Tina’s financial claims in divorce. The husband’s inheritance from his mother may also have to be partially used.

Tina and her husband are not divorced. There has not been a financial order from the court. Tina has not re-married. This means that the financial claims: property adjustment, lump sum orders, spousal maintenance, and pension sharing orders, are all still open to Tina.

Although Tina has been co-habiting with her new partner for six years, this does not have the same weight as a marriage in the eyes of the family court. In any event, Tina seems to have spent her life savings supporting this man so he can hardly be viewed as a valuable resource to Tina whose existence should prevent her from reaching a divorce settlement with her husband.

Tina may well want to go and obtain advice immediately from a family law solicitor who offers legal aid before that scheme dries up in April 2013. The solicitor can advise upon initiating a divorce and also a financial settlement and may also want to explore how Tina’s housing situation can be secured should her present partner leave her. Is the rent paid to a private landlord or to a local authority or housing association? Steps may be taken under the Family Law Act 1996 to prevent Tina’s partner from relinquishing the tenancy and therefore making Tina homeless.

I doubt Tina can take any further steps against her present partner for the monies she has spent on him. As co-habitees, neither has any financial responsibilities to the other.

Tina may also wish to consider booking an appointment with her local CAB to have her situation assessed by a welfare rights benefits adviser, particularly in view of her health.

How does cohabitation affect divorce settlement? How does it affect my imminent divorce or the payment of spousal maintenance payments? The vexed questions surrounding cohabitation usually cause a bulge in my virtual postbag. The common scenario is as follows: there is a divorce and one spouse pays maintenance to the other. The spouse paying the maintenance moves in with a new partner, often with a new family. The new family struggles financially, and the ex-wife refuses to settle for reduced payments. Years after the divorce, resentment festers on both sides, often crystalising about this time of the year when one ex seems to be able to go on a ‘swanky foreign holiday’ whilst the other contemplates a day trip to Butlins with packed lunches all round.

I think it is difficult enough for ex-spouses trying to get on with one another in a post-divorce world with the difficult issue of the maintenance order that goes on and on (and on). But at least there is resolution of a sort for those who have dissolved their marriages and been given their financial orders. So spare a thought for those whose divorce or financial proceedings appear to have dragged on for years, outliving Government administrations and Take That comeback tours. How can you plan a life with a new partner when the legal obligations for your previous spouse (and the children you’ve had together) have not been put to bed?

To the postbag…

Sinead contacted me recently and this is her query:

I have read your blogs on co-habitation after a divorce where the person recieving maintenance etc has gone on to live/marry etc and how this affects the level of maintenance paid. How does it work the other way round?

My partner (of 7 years), separated 71/2 years ago, divorced almost 2 years ago is currently going through the throws of financial settlement. He has 2 adult children and a 10yr old. The 10yr old currently lives with his ex wife in the old family home. He has continued to pay the mortgage/endowments on the family home and cleared many joint debts throughout this period (equates to about 75,000 to date). He was retired from the army 2 years ago with a pension and lump sum. He has not had work since. The lump sum has now all gone (living costs and paying debts etc mentioned above) and his monthly income does not cover his outgoings if he continues to pay the mortgage etc on the family home. As a consequence I am now supporting him (and as such payments to his ex wife!) – I am on a reasonable salary, almost paid off the mortgage on my house and have substantial savings (I had the misfortune of losing both parents and inheriting as well as having saved my whole working life) I have 3 children of my own that I support independently from my partner.

Will this have any influence on the likely award to the ex wife? (with her salary and benefits she brings home about the same as my partner) or will his financial status be looked at independently?

How does cohabitation affect divorce settlement?

Well, the first thing I should say is that it is always difficult in matrimonial settlement cases to isolate maintenance claims from capital claims. Each marital settlement needs to be viewed as a whole. The existence of a new relationship, especially one of cohabitation is a fraught issue. The cohabitant is not one of the legal parties to the divorce but their presence, like that distant stranger on the shore, is hard to ignore. I have been critical of the way in which the courts presently deal with committed cohabitation where the receiver of maintenance (after a divorce has been granted and a financial order given) is able to pool resources with a new partner and still receive substantial maintenance from their ex. But Sinead’s case deals with a situation where the financial settlement has not been achieved and there is no financial order yet. With this thought in mind I can offer the following observations:

Sinead’s partner was divorced 2 years ago (by which, I assume, a Decree Absolute was granted by the court dissolving the marriage). This is before there has been a financial settlement, either a consent order or an order given by a judge in the absence of agreement. This is unusual. If lawyers are involved, in most cases, they will agree not to apply for Decree Absolute until the court has given a final order dealing with finances. However, the prejudice, if there is one, would likely be to the ex-wife in this situation as she will automatically lose the right to widow’s benefit and possibly certain dependent’s benefits under the Army pension in the event of Sinead’s partner dying before the financial settlement is agreed.

what about pension sharing orders? Even though this army pension is in payment it can still be subject to a pension sharing order. Expert advice is required (normally from financial advisers instructed by lawyers) as the valuation of armed forces pensions, like police pensions, is not straightforward.

Sinead’s partner has retired from the army. He took a lump sum but has expended this over the course of the last 2 years in meeting income needs (probably both his own and also his ex-wife’s). Generally speaking, it is never a good idea to meet income needs out of capital. Sinead’s partner will no longer have this capital cushion. I do not know if he has any other savings. But now the capital has gone, and since I am told he has not worked since retirement, how can he maintain the payments made to the ex-wife, especially the mortgage payments on the former matrimonial home? Sinead cannot be expected, and legally, certainly is not required, to subsidise her partner’s ex-wife. But if things carry on as they are, this is effectively what she will end up doing.

What about the former matrimonial home? I am presuming it is jointly owned by Sinead’s partner and his ex-wife. It would appear there were 3 children of the marriage but only one of them, a 10 year old, still resides at the property. Is the size of the property surplus to the needs of the ex-wife and child? Could they downsize and do so now before the child enters the early years of secondary education when a move could impact upon educational attainment? Would there be sufficient equity following a sale to allow the ex-wife to purchase a new property free of mortgage charge, or with a much reduced mortgage, that would place less reliance upon the ex-husband’s income (which must come from his pension payments). If there are lawyers involved in this case, I suspect that they will identify the potential sale or retention of the family home as key in this case. But to let the situation drift on as it has been doing helps nobody here.

I do not know the length of this marriage or the ages of Sinead’s partner and his ex-wife. Judging by the age of the children I deduce that it is a ‘long’ marriage. This can dictate the length of any spousal maintenance claims. So, it may be more likely that this could be a joint lives spousal maintenance claim. That is, Sinead’s partner may have to pay spousal maintenance to his ex-wife until he dies, she dies, she remarries, or the court relieves him of the liability by a further court order. There may be an argument that the ex-wife should not receive any spousal maintenance at all if the incomes of ex-wife and ex-husband are roughly similar. However, I would imagine that a court would expect at least nominal maintenance to be paid to the ex-wife because there is still a minor child of the marriage residing with the ex-wife.

I should also mention that I do not know which area of England & Wales the ex-wife lives in. Two courts, 100 miles apart, can produce significantly different outcomes based on the same set of facts. Talking to family lawyers from different parts of the country, it is clear that some courts seem content to award spousal maintenance for short periods of time after divorce whilst others insist upon joint lives orders. I would not say there is a North/South divide on this issue but it is clear that there are regional disparities (even though the law is the same!)

It is interesting to note the long period of separation without a financial settlement (sealed by a court order) being put in place. This long delay almost invariably makes it harder to reach agreement. For instance, Sinead’s partner has been paying for the mortgage and endowments on the former matrimonial home. His lawyer may say that if these monies have come out of his pension capital then he should ask for a credit for those payments (say 50%) to be taken account of in the financial settlement. This argument would be based on the fact that he had increased the value of the capital assets of the marriage (the home and the associated endowment policies) by depleting his own capital (from his pension lump sum). But the devil is always in the detail. The ex-wife’s lawyers may argue that the mortgage and endowment payments were in lieu of the proper spousal maintenance and proper child maintenance that should have been paid to the ex-wife and children over the 7.5 years of separation. And, for all I know, the mortgage may be an interest-only mortgage which does not reduce the amount of capital borrowed over the term of repayment. So it’s fingers crossed, that the endowment policy will be substantial enough at the point of maturity to pay off the outstanding mortgage sum.

If the capital assets of the marriage are modest and the income of the parties is also modest, then this may be characterised as a needs case. That is, there may not be enough capital within the marriage, to meet the housing needs of the ex-wife and Sinead’s partner. The ex-wife may argue that she needs more than 50% of the capital in the home (once the mortgage is paid off) because the housing needs of the 10 year old child will be resting on her shoulders. (And the court will give first consideration to the needs of any minor children of the marriage).

The complication in these circumstances is that Sinead’s partner has been cohabiting with Sinead for a significant period of years. The fact of cohabitation with a new partner by one spouse is taken into account by the court and I think the weight that may be attached by a court to this cohabitation will work itself out along the following lines:

Is the new partner a potential income or capital resource? In this case Sinead has built up her own capital by dint of hard work and has also inherited capital from her parents’ estates. Sinead receives a good wage. She has in effect subsidised the ability of her partner to continue the payments to the ex-wife. If Sinead was in a position of having no capital, living in a rented property with her partner, and entirely dependent upon benefits, then we may safely say she would be an added responsibility for her partner rather than a capital or income resource for her partner.

Even if the new partner does have capital and income resources, is there a competing demand upon the new partner’s resources that should effectively cancel out the resources? In Sinead’s case, yes, she has three children of her own and they unarguably would have first call upon her resources.

How long and how committed does the cohabitation appear to be? A few years of on/off cohabitation is not going to really impact upon any court’s consideration in a divorce financial settlement. But Sinead’s case is somewhat different. There appears to be some 7 years of cohabitation. A court may think that is a fairly settled situation. Perhaps a court may think it could give more of the capital in the matrimonial home to the ex-wife because the husband’s housing needs have been addressed by living with Sinead. The reality, of course, is that Sinead could ask her partner to leave her house the day after any such divorce settlement was agreed. He has no security of tenure in Sinead’s property (on the information provided by Sinead). So, he does still have housing needs and some entitlement to the capital in the former matrimonial home.

Is it likely that Sinead and her partner will marry? Any such intention would have to be declared by Sinead’s partner at the point of submitting a financial consent order (presuming there is an agreement) to the court for approval. If marriage is likely, then Sinead will appear to the court to represent a more solid capital and income resource for her partner and the ex-wife will probably seek more of the capital in those circumstances.

Sinead will probably want to keep her capital savings separate from her new partner until (and even after) his financial settlement is resolved. She will not be thinking of giving her partner a share in her own property. After all, she has her own children to think about and prioritise. She may well be asked by the ex-wife’s solicitors (via a request to her partner) to give disclosure of her financial means so they can gauge whether she really does represent a resource that should be taken into account. Sinead does not have to provide detailed disclosure but may consent to provide a headline figure for her net income and her net capital. It would be prudent, however, to state that Sinead does have three children to maintain with her income and there is no legal obligation upon her whatsoever to support her partner or, indirectly, his ex-wife.

Sinead may, if she sought legal advice, be told to have a cohabitation agreement with her new partner or, if she plans to marry him in due course, to have a pre-nuptial agreement. So the answer to the question: “How does cohabitation affect divorce settlement?” is “It depends on the facts in each case”.